PECONIC INDUSTRIAL DEVELOPMENT LTD v. LAU KWOK FAI AND OTHERS

CACV245, 247 & 248/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 245 AND 248 OF 2006

(ON APPEAL FROM HCA NO. 3083 OF 2002)

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BETWEEN

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 247 OF 2006

(ON APPEAL FROM HCA NO. 16255 OF 1999)

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D E C I S I O N

1.  These are three applications for security for costs.  The total sum of security in respect of all three is said to be some $2 million or more.  The amounts have not been divided between the various Defendants and it is suggested that I might like to order a third against each.  This is not a course which really appeals to me.  

2.  Having had a look at the skeleton bill of costs, all I can say is that no effort has been made to reduce costs in any way.  The bill is, if anything, inflated.  The amount sought on the security is the highest that has come before this Court in the 10 years that I have been dealing with security for costs on appeal and that tells me something.  It tells me that there must be some merit in the appeals.  I have looked at the judgment below; I have looked at the notices of appeal and I have read the skeleton arguments and all I am prepared to say now is that I am not prepared to discount the fact that there are grounds of appeal which should be argued. 

3.  Each of these three Defendants is impecunious.  There is no way that they could possibly afford, it seems to me, the damages that have been awarded against them of over $300 million.  It is really accepted that if security were awarded in anything like these sort of amounts which the Plaintiffs are talking about, this would stifle the appeals.  I have to say that I do not consider that is right.

4.  In respect of two of the parties where security for costs is sought, there are Mareva injunctions on foot and that seems to me to protect the Plaintiffs as much as any order for security for costs. 

5.  One further matter that I would raise at this stage is this, that the suggestion is always made when security for costs is sought that the person against whom the security is sought can borrow the money and can seek to raise the money somewhere else.  I have never been enamoured with that suggestion.  In respect of companies, it may be correct, but in respect of individuals, I am not sure that it ever was correct.  Nowadays, where it has now been established that anybody who is prepared to finance litigation will become at risk as to payment of costs to the opposing party, I find that it is, perhaps, something which needs looking at again as to whether that is an appropriate approach by the court to the question of security for costs.

6.  In any event, for the other reasons which I have explained, I consider that this is not an appropriate case for security for costs.  These are appeals which have been set down for five days in November.  There seem to me to be substantial arguments on the appeals and they should go ahead and these appeals should not be stifled. 

(Submissions by counsel on costs)

7.  Costs in the appeal.